Finnish telecom equipment manufacturer Nokia is setting up a new savings program and wants to cut up to 14,000 jobs. CEO Pekka Lundmark wants to spend between 800 million and 1.2 billion euros less by the end of 2026 to achieve the long-term target of an operating margin of 14 percent, the company announced on Thursday in Espoo near Helsinki. The plan provides for a staff reduction of up to 15 percent.
Due to a lack of sales, Lundmark also expects only the minimum of its annual sales target. “We are targeting the lower end of our 2023 sales range,” he said, according to the statement.
So far, Nokia aimed to generate 23.2 to 24.6 billion euros, with the lower end corresponding to a four percent decline compared to the previous year at constant exchange rates. As a result of current cost-cutting measures, the adjusted operating margin is likely to be in the middle of the target range of 11.5 to 13 percent. Nokia had already lowered its annual targets in the first half of the year.
Collapse of profits
In the third quarter, Nokia’s net sales fell by a fifth compared to the previous year to just under five billion euros. Adjusted operating profit fell by more than a third to 424 million euros, well below average analyst expectations. The bottom line is that Nokia earned 299 million euros on a comparable basis, after 551 million last year.
Just early in the week, Swedish rival Ericsson reported a $1 billion loss in the third quarter and warned that customer investment appetite would remain subdued.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
